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To amend the Internal Revenue Code of 1986 to provide that certain tips shall not be subject to income taxes for a period of 5 years.
1/21/2025, 9:20 AM
Summary of Bill HR 558
The bill specifies that tips received by employees in the service industry, such as waiters, bartenders, and other tipped employees, will not be included in their taxable income for a period of 5 years. This means that these workers will not have to pay income taxes on the tips they receive during this time frame.
The goal of this legislation is to provide financial relief to workers in the service industry who have been hit hard by the economic impacts of the COVID-19 pandemic. By exempting certain tips from income taxes, the bill aims to put more money in the pockets of these workers and help stimulate economic growth in the service industry. Overall, Bill 119 HR 558 seeks to support workers in the service industry by providing them with temporary tax relief on their tip income. This non-partisan legislation aims to address the financial challenges faced by these workers and help them recover from the economic hardships brought on by the pandemic.
Congressional Summary of HR 558
Tip Tax Termination Act
This bill excludes from gross income for federal tax purposes up to $20,000 of eligible tips received during the tax year. The bill also requires the Internal Revenue Service to modify the tables and procedures used to withhold federal income tax from wages to take into account eligible tips excluded from gross income.
The bill defines eligible tips as amounts received while performing services in a position that generally relies on tips as part of wages, including cosmetology, hospitality, and food service.
Further, under the bill, the amount of eligible tips excluded from gross income must not be included in determining federal tax deductions or credits, except for purposes of calculating the child tax credit and earned income tax credit.
Finally, the exclusion from gross income only applies to eligible tips received before 2030.
Current Status of Bill HR 558
Bipartisan Support of Bill HR 558
Total Number of Sponsors
1Democrat Sponsors
0Republican Sponsors
1Unaffiliated Sponsors
0Total Number of Cosponsors
0Democrat Cosponsors
0Republican Cosponsors
0Unaffiliated Cosponsors
0Policy Area and Potential Impact of Bill HR 558
Primary Policy Focus
Alternate Title(s) of Bill HR 558
Comments
Dalton McFarland
10 months ago
I don't care about this bill. It's stupid and won't make a difference. Just another waste of time by politicians. Did you know that this bill also includes provisions for tax breaks for small businesses?
